CONTAINER TERMINAL OPERATIONS AT

JAWAHARLAL NEHRU PORT TRUST

Dissertation Submitted to the
D.Y. Patil University
In partial fulfillmentof the requirements for the
Award of the Degree of
MASTERS OF BUSINESS ADMINISTRATION
Submitted by:
AKSHAY REDIJ
(Roll.No.013012)

Research Guide:
Dr. SUMAN SAURABH
Assistant Professor
D.Y. Patil University
School of Management
CBD Belapur, Navi Mumbai
December 2014
1

TO STUDY AND ANALYSE CONTAINER

TERMINAL OPERATIONS AT JAWAHARLAL
NEHRU PORT TRUST
(WITH SPECIAL REFERENCE TO NAVI MUMBAI
IN MAHARASHTRA)

DECLARATION
I hereby declare that the dissertation TO STUDY AND ANALYSE
CONTINER TERMINAL OPERATIONS AT JAWAHARLAL NEHRU PORT
TRUST

(WITH

SPECIAL

REFERENCE

TO

NAVI

MUMBAI

IN

MAHARASHTRA) submitted for the MBA Degree at D.Y. Patil Universitys

School of Management is my original work and the dissertation has not
formed the basis for the award of any degree, associate ship, fellowship or
any other similar titles.

Place: Navi Mumbai

Date:

Signature of the Student

AKSHAY REDIJ

Certificate
This is to certify that the dissertation entitled TO STUDY AND ANALYSE
CONTAINER TERMINAL OPERATION IN JAWAHARLAL NEHRU PORT TRUST
(WITH SPECIAL REFERENCE TO NAVI MUMBAI IN MAHARASHTRA)is the bona
fide research work carried out by Mr. AKSHAY REDIJ student of MBA, atD.Y. Patil
Universitys School of Management during the year 2013-2015, in partial
fulfillment of the requirements for the award of the Degree of Master in Business
Management and that the dissertation has not formed the basis for the award
previously of any degree, diploma, associate ship, fellowship or any other similar
title.

(Dr. R. Gopal)

Dr. SUMAN SAURABH

Director,

Assistant Professor

School of Management,

(Guide Name)

D.Y. Patil University)

Place: Navi Mumbai
Date:

ACKNOWLEDGEMENTS
In the first place, I thank the D.Y. Patil University, School of Business
Management, Navi Mumbai for giving me an opportunity to work on this project. I
would also like to thank Assistant Professor Dr. Suman Saurabh , School of
Management, D.Y. Patil University, Navi Mumbai for having given me his valuable
guidance for the project. Without his help it would have been impossible for me
to complete the project.
I would also like to thank the various people from the JAWAHARLAL NEHRU
PORT TRUST who have provided me with a lot of information and in fact even
sharing some of the confidential company documents and data many of which I
have used in this report and without which this project could not have been
completed.
I would be failing in my duty if I do not acknowledge with a deep sense of
gratitude the sacrifices made by my parents and thus have helped me in
completing the project work successfully.

Place: Navi Mumbai

Signature of the student.

INDEX
Sr No

Title

Pg No

A
B
C
1
2
3
4
5
6
7
8
9

List of Tables
List of Figures
List of Graphs
Executive Summary
Introduction
Literature Review
Aims and Objectives
Research Methodology
Questionnaire
Analysis
Conclusion
Recommendations

7
7
7
10
12
16
20
44
56
58
118
123

LIST OF TABLE AND FIGURE

TABLE
Table No:

Title

Page No.

1.

Hinterland region of India

93

2.

State wise share of Container

97-110

3.

State wise Hinterland Mapping

112-115

FIGURE
Table No:

Title

Page No.

Relationship of port Economic and macroscopic

Identification of goals

84

Opportunity landscape of JNPT

77

Short & Long term

89

GRAPHS
Table No:

Title

Page No.

Share of States for container

104

Share of Type of Hinterland

105-107

ABBREVIATIONS
BOOT Build Own Operate & Transfer
BOT Build Operate Transfer
CAGR Compounded Average Growth Rate
CFS Container Freight Station
CHA Custom House Agent
CII Confederation of Indian Industry
CONCOR Container Corporation of India
DWT Dead Weight Tonnage
EDI Electronic Data Interchange
FEU Forty feet Equivalent Unit
GAPL Gujarat Pipavav Port Limited
GDP Gross Domestic Product
GMB Gujarat Maritime Board
GPS Global Positioning System
GRT Gross Registered Tonnage
GTIPL Gateway Terminals India Private Limited
ICD Inland Container Depot
ICT Information and Communication Technology
IPA Indian Port Association
IPMS Integrated Port Management System
JNPT Jawaharlal Nehru Port Trust
KPT Kandla Port Trust

MICT Mundra International Container Terminal

MIS Management Information System
MOS Ministry of Shipping
MPA Major Ports Act
NSICT Nhava Sheva International Container Terminal
PPP Public Private Partnership
PSA Port of Singapore Authority
RFID Radio Frequency Identification Device
RMGC Rail Mounted Gantry Cranes
RMQC Rail Mounted Quay Cranes
RTGC Rubber Tyred Gantry Cranes
SBM Single Buoy Mooring
SEZ Special Economic Zone
SPM Single Point Mooring
SPV Special Purpose Vehicle
TEU Twenty feet Equivalent Unit
TOS Terminal Operating System
VTMS Vessel Traffic Management System

CHAPTER 1
EXECUTIVE SUMMARY

10

EXECUTIVE SUMMARY
The real growth that Indian GDP has is reflected in its international trade and
consequently in the traffic growth that ports have been witnessing over the past few
years. This trend in growth is expected to continue, with international trade expected to
grow at a rate even higher than at present. The ability of Indian port infrastructure to
meet these increasing demands will be critical to the growth of the economy. In this
context, it has been recognized that a national plan needs to be developed which
wouldidentify in a structured manner, the required investments in port and related
infrastructure, while at the same time reducing dependence on government funds. In
order to meet this objective, the planning commission and the ministry of shipping, road
transport and highways has initiated this business planning exercise for major ports.

11

CHAPTER 2
INTRODUCTON OF JNPT

12

Introduction of JNPT
Indias increasing international trade necessitated the development of additional
facilities to decongest the traffic at the Mumbai Port. The need of an alternative port in
the region to handle the increasing traffic led to the development of JNPT in 1989. With
its vast back up area JNPT was believed to have a strong potential for the development
of additional facilities as per demand and was ideally suited for future maritime
requirements.

JNPT Profile

The Jawaharlal Nehru port at Navi Mumbai (JNPT) was established on 26 May 1989. It
was dedicated to the nation by former prime minister of India . Late Shri Rajiv Gandhi.
The port became operational that day. The main purpose for developing JNPT as a
satellite port for Mumbai port to reduce the traffic . With the time it was hard to handle
the traffic of MBPT. With the time it was hard to handle the traffic of MBPT. JNPT was
constructed in a record time of just 3.5 year with a cost of round Rs 1000 crores , it is
only Indian port built to international standard with modern working norms .Because of
its high level of automation and computerized functioning it was envised , as the hitech
port of the 21st century .certified an ISO 9000:2001 port , it was initial planned to be a
satellite port to the Mumbai port with the purpose to decongest the traffic at latter. Today
the JNPT port has already established itself as the major port catalyst for the trade
and commerce of the country.
With its strong commitment to provide seamless service to its customers as Indias
prime facilitator of the International trade.JNP strives to be undisputed in the south
Asian region in year to come .
Gateway terminal India Private Ltd. (GTI) is a joint venture company of A.P Moller and
container corporation of india ltd.(CONCAR). GTI came in to existence in year 2006 and
has signed license agreement with Jawaharlal Nehru Port Trust(JNPT) to build and
operate for the next 30 years . In the short span of time GTI has recorded record break
13

growth . With the latest and automatic equipments,expertise in marketing and

experience in the container handling they contributed 99% in container handling growth
of 24% during 2012-2013 which was 3rd highest in Asia after two chinese.
Liquid cargo jetty was fuctional from march 2002 , foe handling liquid cargo including
POL products . It is joint venture of M/S Bharat Petroleum Corporation Limited (BPCL)
M/S Indian oil Corporation Limited (IOCL) on BOT basis. Total liquid cargo handled for
year 20012-2013 was 5.87 million tones.
After success of the government policy of development of container terminals by PPP,
In the mean time , JNPT is planning to develop ti its fourth container terminal on BOT
(built ,operate and transfer) basis.
The fourth container terminal will be developed in two phase and the planned capacity
of each phases is 2.4 million TEUSs per annum. The project has an expected
investment of RS.6700 cr JNPT is the second youngest port after Ennore. JNPT is
located at the eastern end of Mumbai in the Nhava Sheva area and situated at latitude
18 56 43 N and longitude 72 56 24 E. JNPTs approach channel is an extension of
the Mumbai Harbour main channel (See Exhibit ) from a location south of Jawahar
Dweep Island. In the Nhava Sheva area at the eastern end of
Mumbai Bay is located Jawaharlal Nehru Port, approx 33 km inland of the Mumbai
Harbour Channel entrance point at sea. The Elephanta Island is on one side, facing the
port and Nhava and Sheva Islands are on the other end. JNPT lies towards the east of
the Bombay Port.
Current designed channel depth of JNPT is 11 metres and depth at berths is 13.5
metres. JNPT can take in vessels having laden draft upto 12.5 metres. A map of JNPT
has been included overleaf.
The width of the channel is 400 metres at entry point and 460 metres off the berths. Port
cargo handling facilities include container terminals, a liquid handling terminal and a
shallow water berth which can handle break-bulk and container traffic both.

14

Port Highlights

Accredited with ISO 9001-2000 Certification

Ranks 31st among the top 100 Container Ports in the world

Handles 56% of Indias total containerized cargo

Highly automated and computerized operations with Single Window System

Recipient of Indira Priyadarshini VrikshamitraAward 1996 for the Greenest

Port in India

Equipped with the latest Vessel Traffic Management System (VTMS) to track
/monitorvessel movements ensuring safe navigation

Spread over a land area of 2,584 hectares

Served by 16 Container Freight Stations and over 23 Inland Container Depots

Well connected by National Rail/Road network

JNPT has an important place amongst Indian ports due to the kind of traffic that it
serves as well as being a pioneer in involving large-scale private sector
participation. It is also one of the first ports to initiate this exercise.

JNPT consisted of 3 phases

Inception stage As-is assessment of the port

Interim stage Traffic forecast, vision development & projects

Draft final stage Action plan and financial model

The as-is assessment identified general port operations, hinterland connectivity

and competitive position.

ECONOMIC DEVELOPMENT THROUGH PORTS

A port becomes a wheel of economy if it runs efficiently. Presently the function of

a port is not only limited but has expanded to a logistical platform. The efficiency
of a port is important in international trade since a seaport is the nerve of foreign
trade of a country.

A seaport is the compulsory transit point for the bulk of this trade, permitting the
import of goods, which the country does not itself produce in sufficient quantity
15

and the export of items which the country has a surplus or has a competitive
edge to produce contributing to the development of its economy. Besides, a port
is also a place for the provision of further services, which add value to the
products transported and thus helps the increasing demand of trade.

The globalization of world economy has brought about tremendous increase in

exchanges of goods across the world. The world trade also accelerated as cost
of shipping has increased due to the introduction of economy of scale and the
development of technology in shipping.

To cope with the ever growing world trade, ports of every country will no doubt
continue to play a critical and important role in providing the cheapest mode of
transportation.

Relationship

between

macroeconomics,

port

economics

and

port

performance

Port performance and port economics are closely related with macroeconomics
hence, any changes in port traffic or operation and port / port organization has an
impact on national economy particularly on the hinterland.

Indian seaports are today more than just government owned public utilities; they
are indeed, focal points of convergence for several contending and competing
business interests from shipping lines, port authorities, and individual terminal
operators to freight forwarders and inland logistics agencies; not to leave out the
shippers (the exporter-importer fraternity) whose cargo is what is being ultimately
being transported. They represent what may rightly be considered a complex
mosaic of contractual and business relationships, which in turn give rise to maze
of regulatory and operating institutions and procedures and ever-changing rules
of dynamic inter-play.

16

Relationship of Port Economics And Macroeconomics Figure 1

Under the impact of first-generation port reforms, initiated since the mid-nineties,
following economic liberalisation and globalisation policies, the entire gamut of
existing institutional arrangements and underlying transactional and business
processes in the port sector have been undergoing a profound transformation.

Consequently, conventional port and terminal ownership, management and

regulatory frameworks guiding the port operations are undergoing changes in line
with broader process of functional evolution of ports and global maritime trade.

The critical changes underway in the port sector have many facets that need to
be brought under a comprehensive review and research scrutiny from
contemporary perspective. Few attempts made in the past have merely focused
on the historical and social aspects of Indian port sector, without examining the
underlying business and economic processes that make port inalienable part of a
larger national and international economy.

Not too surprisingly, there are hardly any significant books or research
monographs that portray a contemporary emerging picture of the Indian port
sector, as the gateways to global trade. This leaves a large gap to be filled and
17

considering that Indian port projects are now increasingly becoming key
destinations for strategic business investments and are increasingly becoming
key links in the rapidly expanding global trade, understanding of the working of
the port sector becomes an urgent and critical task both from the public policy
angle and strategic business decisions.

Indeed, there have been a number of project-specific and port-specific studies

and long-term forecasts on cargo traffic growth made by a number of technical
and business consultants to the port and shipping sector. Recently, Rail India
Technical and Engineering Services (RITES) have come up with Perspective
Plan for Indian Port Sector - Vision 2020 for the Union Ministry of Shipping.

Indias Maritime Trade

Indias maritime trade comprises of export-import trade in various bulk

commodities like crude oil and other petroleum products, iron ore and coal,
besides general purpose cargo. Over the last ten years, since the onset of
economic liberalization, there has been a significant spurt in handling of valueadded goods mainly in form of containerised cargo movement, in several Indian
ports.

This has given rise to many new dimensions in the development of the port
sector in the country. Containerisation of cargo has brought about a significant
redefinition of port services and demands for highly sophisticated handling
equipment and logistics service efficiencies.

The shift away from commodity nature of Indias export trade is particularly,
noticeable in the marked shift towards increasing value added exports and drive
for global competitiveness.The shift in the pattern of trading is however, yet to
find adequate support in terms of a maritime infrastructure.

Interestingly, in the past ten years while overall cargo growth (reckoned at about
9-10 per cent) has been quite impressive, new demands have been generated
on the port sector for adding on more cargo handling capacity and creation of
new-dedicated berths and cargo terminals.

18

Consequently, the port sector is going with considerable business optimism with
respect to generation of increasing cargo traffic volumes and of trade in general
in the coming years. Considerable future business potential is also seen with
respect to generating enhanced earnings from port sector operations through
improving efficiencies and other value-added activities contributing also thereby
to making countrys external trade competitive in the global market.

Economic Survey 2013-14: India has second fastest growing services

sector

Last

Updated:

Wednesday,

July

9,

2014,

19:24

New Delhi: India has the second fastest growing services sector in the world with
a compound annual growth rate at 9 percent, just below China's 10.9 percent,
during

2001

to

2012,

the

Economic

Survey

said

Wednesday.

Among the world's top 15 countries in terms of GDP, India ranked 10th in terms
of overall GDP and 12th in terms of services GDP in 2012, it said.
"India has the second fastest growing services sector with CAGR at 9 percent,
just below China?s 10.9 percent, during the last 11-year period from 2001 to
2012,"

the

survey

said.

It said that services share in world GDP was 65.9 percent but its share in
employment

was

only

44

percent

in

2012.

In India, the services sector had a high share in income at 56.9 percent in 2012
with

lower

share

of

28.1

percent

in

employment,

it

added.

In 2013-14 the growth rate of the services sector at 6.8 percent is marginally
lower than in 2012-13. This is due to deceleration in the growth rate of the
combined category of trade, hotels, restaurants, transport, storage and
19

communications.
The survey, which was tabled in Parliament today, said that services in India are
emerging as a prominent sector in terms of contribution to national and states'
incomes,

trade

flows,

FDI

inflows

and

employment.

Further, it said that the immediate challenge in this sector is revival of growth.

India's services sector which was growing at a steady rate of over 10 percent
since 2005-06 has shown subdued performance in the last three years.
Revival, it said, could be achieved through reforms and speeding up of the policy
decision making, a targeted approach with focus on big ticket services.
"Some services like software and telecom were big ticket items that gave India a
brand image in services. While further focus on these services is needed to
retain and further our lead, the time has come to focus on some other high
potential big ticket items that have high manufacturing-sector and employment
linkages,"

it

added.

Going forward, it said, 2014-15 seems to augur well for the services sector with
expansion

in

business

activity

in

India.

"There are also signs of revival in growth of the aviation sector with the
announcement of new players like Air Asia and Tata-SIA Airline after a turbulent
period

of

withdrawals

and

losses

by

some

airlines,"

it

added.

Indications of revival in the world GDP and trade growth in general and of
developed countries in particular, could help in revival of the tourism and
shipping

sectors.

"With a stable government in place and growing optimism which could translate
into investment and growth, some quick reforms and removal of some barriers
and obsolete regulations in the services sector could help. The downside risk
however

is

the

fragile

20

global

situation,"

it

said.

The survey said many issues including domestic regulations hinder growth
prospects of the services sector, which if addressed deftly could help the sector
and leads to exponential gains for the company . Listing some general issues, it
said that there is an urgent need for a nodal agency and marketing for the
sector .Despite having strong growth potential in various services sub-sectors,
there

is

no

single

nodal

department

or

agency

for

services.

Services activities cover issues beyond trade and a more proactive approach and
proper institutional mechanism is needed to weed out unwanted regulations and
tap the opportunities in the sector in a coordinated way, it added.
There is also need for promotional activities for service exports like setting up a
portal, showcasing Indias competence in non-software services in exhibitions,
engaging

dedicated

brand

ambassadors

and

experts.

It also said that there is plenty of scope for disinvestment in services PSUs under
both

central

and

state

governments.

"Speeding up disinvestment in some services-sector PSUs could not only provide

revenue for the government but also speed up the growth of these services," it
said.
The sector is also facing credit, tax and trade policy related issues.
"These include use of 'net' instead of 'gross' foreign exchange criteria for export
benefit schemes, the issue of retrospective amendments of tax laws like
amendment to the definition of royalty to include payment of any rights via any
medium for use of computer software, tax administrative measures to tackle
delay in refunds, introducing VAT refund for foreign tourists," it said.
Further it said that India need to revamp its port services as it does not have
world

class

facilities.

"Third-generation ships are not able to enter the harbour and goods have to be
offloaded outside in smaller ships, adding to costs. Its immediate focus should be
on building world class ports providing world class services," it said.
On railways, it said that a proposal has been initiated by Indian Railways, for
making suitable changes in the existing FDI policy in order to allow foreign
investment in railways, to foster creation of world class rail infrastructure.
21

"The proposal envisages allowing FDI in all areas of the rail sector except railway
operations. Even in railway operations, FDI is proposed in PPP projects, for
suburban corridors, high speed train systems, and dedicated freight lines," it said.
While privatisation of railways has been successful in some countries like Japan,
it

has

failed

in

some

others

like

the

UK.

"So this proposal needs to be examined carefully and quickly to allow

privatisation/ FDI in areas where it is feasible," it added

Indias Foreign Trade (MERCHANDISE): OCTOBER, 2014

EXPORTS (including re-exports)

Exports during October, 2014 were valued at US $ 26094.07 million

(Rs.160066.25 crore) which was 5.04 per cent lower in Dollar terms (5.47 per
cent lower in Rupee terms) than the level of US $ 27480.13 million (Rs.
169320.47 crore) during October, 2013. Cumulative value of exports for the
period April-October 2014-15 was US $ 189795.47 million (Rs 1145605.36 crore)
as against US $ 181234.98 million (Rs 1080203.41 crore) registering a growth of
4.72 per cent in Dollar terms and growth of 6.05 per cent in Rupee terms over the
same period last year.

IMPORTS
Imports during October, 2014 were valued at US $ 39451.53 million
(Rs.242003.58 crore) representing a growth of 3.62 per cent in Dollar terms and
a growth of 3.16 per cent in Rupee terms over the level of imports valued at US $
38075.02 million (Rs. 234601.50 crore) in October, 2013. Cumulative value of
imports for the period April-October 2014-15 was US $ 273551.51 million (Rs
1651470.41 crore) as against US $ 268554.34 million (Rs 1590363.03 crore)
registering a growth of 1.86 per cent in Dollar terms and growth of 3.84 per cent
in Rupee terms over the same period last year.

CRUDE OIL AND NON-OIL IMPORTS:

Oil imports during October, 2014 were valued at US $ 12365.2 million which was
19.2 per cent lower than oil imports valued at US $ 15293.6 million in the
22

corresponding period last year. Oil imports during April-October, 2014-15 were
valued at US $ 94841.9 million which was 0.5 per cent lower than the oil imports
of US $ 95306.0 million in the corresponding period last year.

Non-oil imports during October, 2014 were estimated at US $ 27086.3 million

which was 18.9 per cent higher than non-oil imports of US $ 22781.4 million in
October, 2013. Non-oil imports during AprilOctober, 2014-15 were valued at US
$ 178709.6 million which was 3.2 per cent higher than the level of such imports
valued at US $ 173248.3 million in April-October, 2013-14.

TRADE BALANCE

The trade deficit for April-October, 2014-15 was estimated at US $ 83756.04

million which was lower than the deficit of US $ 87319.36 million during AprilOctober, 2013-14.

INDIAS FOREIGN TRADE (SERVICES): SEPTEMBER, 2014

(As per the RBI Press Release dated 14th November, 2014)

A. EXPORTS (Receipts)

Exports during September, 2014 were valued at US $ 12940 Million

(Rs.78759.18 Crore).

B. IMPORTS (Payments)

Imports during September, 2014 were valued at US $ 6174 Million (Rs. 37577.99
Crore).

C. TRADE BALANCE

The trade balance in Services (i.e. net exports of Services) for September, 2014
was estimated at US $ 6766 Million.

23

24

25

Chapter 3
LITERATURE REVIEW

26

LITERATURE REVIEW
Vis and de Koster [196] (with some 55 references up to 2001). An overview of relevant
literature for problem classes like arrival of the ship, (un)loading of a ship, 14 D.
Steenken et al .transport of containers from/to ship to/from stack, stacking of containers,
interterminal transport and complete terminals is provided.

Kozan discusses major factors for the transfer efficiency of multimodal container
terminals. A network model reflecting the logistic structure of a terminal and the
progress of containers is shown. Its objective is the minimization of the total throughput
time as the sum of handling and travelling times of containers.

Meersmans and Dekker present an overview of the use of operations research models
and methods in the field of design and operation of container terminals with its decision
problems on strategic, tactical and operational level. Fung presents a three-player
oligopoly error-correction model for forecasting demand for Hong Kongs container
handling services. Due to increasing demand and necessity of higher throughput, early
construction of new terminals is suggested.

Murty et al describe various interrelated complex decision problemsoccurring daily

during operations at a container terminal. They work on decision
support tools and discuss mathematical models and algorithms.

Steenken presents a comprehensive description of logistics and optimization

systems in container terminals shown by example of Burchardkai (Hamburg).
For an early work on berth assignment and berth investment decisions see
27

[45]. A general discussion of different productivity related objectives regarding

transshipment terminals can be found, e.g., in [49, 62]. Additional works giving
more or less general descriptions of container terminals are, e.g., [34,130]. In [34]
the authors view a container terminal as a production system that is represented
as a network of complex substructures or platforms. The idea of platform capacity
is used to represent operational aspects of a container terminal in a mathematical
model for tactical planning. The problem is to allocate resources in each platform
in order to minimize the total delay on the overall network and time horizon.

Konings presents a survey of the possibilities for an intermodal transport

concept of high quality. Conditions for best development of centers, that integrate
transshipment, storage, collection and distribution of goods, are outlined. The internal
transport system is identified as key element. The topic is discussed in detail
for the harbour of Rotterdam.

Nam and Ha investigate aspects of adoption of advanced technologies

such as intelligent planning systems, operation systems and automated handling
systems for container terminals. They set criteria for evaluation of different handling
systems and apply them to examples in Korea. Results show that automation does
not always guarantee outperformance (e.g. higher productivity) it depends on
terminal characteristics such as labour costs.

28

Four different types of automated container terminals are designed, analyzed

and evaluated in a simulation model with very detailed cost considerations by

Liu et al. [126]. The performance criteria that are used in this study to evaluate
and compare different terminal systems are summarized as follows: Throughput:
number of moves/hour/quay crane; throughput per acre; ship turnaround time: time it
takes for a ship to get loaded/unloaded; truck turna

29

CHAPTER 4
AIMS AND OBECTIVES

30

Aims And Objectives

Development of action plans for the port requires the vision to be cascaded to a set of
actionable goals with a timeframe attached to them. Goals were identified through an
analysis of various elements of the vision. JNPT would need to undertake multiple goals
to achieve its vision. The goals that were identified for the port are illustrated below:

Achievement of 10Mn TEUs of traffic at JNPT

Improve efficiency across the port

To develop logistics capabilities and services at JNPT

To expand JNPT to new locations

Invest into hinterland connectivity ventures

Timeframe for Goals

Goals need to be prioritized to ensure planned development at a port. Prioritization of
goals also provides

timeframes within which the goals should be achieved. To

ascertain the timeframe of the goals, KPMG followed a framework of ease of

implementation vs. criticality, which was used to evaluate the goals.

Role of the Port

It is envisaged that the port will increasingly play the role of a landlord with limited
presence in port terminal operations (JNPCT). JNPT will evolve primarily into a landlord
port facilitating services by terminal operating companies and other providers. The
solitary terminal will be the responsibility of JNPT over the medium term horizon of the
plan period

31

PERSPECTIVE PLAN

32

Framework to identify long and short term goals

33

As part of the business plan development exercise an action plan for the port was
developed for the next 7-8 years. This action plan was based on the short term goals
identified Reaching 10Mn TEUs of traffic at JNPT by 2015-16

To offer logistic services at JNPT by 2011-12

To improve efficiency in port operations by 2009-10

Strategy to achieve goals

A strategy to achieve the goals was outlined focussing on the following elements

Cost: JNPT would endeavour to reduce costs by improving efficiency and

thereby ensure competitive services for user.

Customers: JNPT would attract and retain customers through addition of core
and value added services.

Geographies: JNPT would focus on the northern and Maharashtra region and
would enable traffic from the regions through planned development within and
nearby the port.

Services: JNPT would provide value added services and would capture a larger
share of the logistics value chain. The strategy for achieving the goals would
need to be supported by a financial and commercial strategy.

Commercial Strategy: The commercial strategy deals with the three levers of
customer management, cost management and service offerings of the port. It is
aimed at achieving commercial success within the operating business
environment through effective management of customers and suppliers.

34

National Container Traffic Projections using bottom up approach

35

JNPTs Container traffic projections

Capacity of the port would be 11.67 Million TEUs at 75% berth occupancy in 2015-16
and 2016-17. At 70% berth occupancy the overall capacity (under the current
geographical and policy restrictions) of the port would be 10.9 Million TEUs by 2015-16.

As liquid cargo handled by ports consists of products from various industries, the key
industries impacting growth of liquid cargo were studied. The forecast for the traffic was
arrived at 2 levels

National level forecasts for the commodity

JNPT forecasts for the commodity

JNPT liquid cargo traffic was estimated for the categories of crude, POL product,
chemicals and
other liquids. JNPT has no crude linkages with existing refineries and does not service
crude traffic at present. The crude traffic forecast for JNPT was based on ONGC plans
to ship a part of its offshore crude production at Bombay High via JNPT to the coastal
refinery of Mangalore. JNPT POL product traffic is largely coastal based traffic which
follows national trends of coastal traffic. Exports growth from the increase in refining
36

capacity in Mumbai region was factored into the forecast. Since the port can handle
certain liquid chemicals these were studied and grown at appropriate growth rates to
arrive at liquid chemical forecast. JNPT's edible oil/molasses traffic is a significant
portion of national traffic and this traffic is expected to continue. The overall forecast of
liquid traffic through JNPT reaches 15.4 Mntonnesby 2024-25 as seen in
exhibit
Liquid Traffic at JNPT

37

Vessel forecasts

Using the traffic projections for container and liquid cargo, a vessel forecast was carried
out for JNPT. A number of factors impacted this forecast, including the change in profile
of ships on the Europe Asia route as well as the gradual increase expected in parcel
sizes. The expectedvessel calls at JNPT are tabulated in exhibit. As seen the number
ofvessel calls at JNPTreach a peak of 5734 vessels in 2015-16 and then start gradually
decreasing. This is largelydue to the expected continued increase in parcel sizes.

38

Developments between 2006- 07 and 2009-10

39

JNPT Developments Between 2010-11 and 2012-13

40

JNPT Developments Between 2013-14 and 2015-16

41

JNPT Developments Between 2016- 17 and 2020-21

42

Proposed land usage for port operational area of 670 hectares

43

CHAPTER 5
RESEARCH METHODOLOGY

44

RESEARCH METHODOLOGY

Objective
- To attract more container cargo to JNPT Ports.
- To study Western Hinterland Mapping.
- To study Port Choice Determinants.

Scope
-

Study includes container cargo for JNPT.

Data regarding JNPT is provided .

Only loaded containers are considered for the purpose of study. Empty
containers are not part of study.

Study includes five Port Choice Determinants

i.e. Port Infrastructure, Vessel Frequency, Port Location (From Sea Routes), Hinterland
Connectivity and Number of Container Freight station.
-

Assessment of selected ports on the basis of five port choice determinants.

Design
Exploratory Research
Research Process
Hinterland mapping for container cargo.
Opinion of freight forwarders for five port choice determinants to derive ranking of the
same.
Data Collection
Source
-

Primary: Port Authorities, Container Terminals, Freight Forwarders, Custom

House Agents, Shipping Line Agent and Customs Department

Secondary: Indian Ports Association Journal, Times Shipping Journal, Port

Profiles, EXIM Publications

45

Instrument: Personal Interview

Analytical Tools
-

Weighted Mean for ranking of port choice determinants.

Further Scope
-

Detailed analysis of Port Infrastructure with qualitative and efficiency measures.

Survey of shippers to understand their willingness for sending their cargo to

JNPT ports, issues faced by them and expectations as well as streamlining
factors of the process from their side.

SWOT Analysis Strengths, Weaknesses and Threats

The identified constraints and drivers were used as inputs to a SWOT analysis for
JNPT, which eventually led to thedevelopment of the JNPT vision. In this section, a
summary of the strengths, weaknesses and threats has beenprovided, while
opportunities have been covered in detail in the next sub-section.Development of JNPT
Vision SWOT Analysis Strengths, Weaknesses and Threats
Activities in the SWOT Workshop

The SWOT analysis was carried out through a SWOT workshop involving key
port stakeholders.

These stakeholders were divided into groups that individually developed a SWOT
matrix for JNPT.

Inputs from all groups along with KPMG analysis was used to arrive at a
perspective SWOT for JNPT.

The participants of the SWOT workshop were representatives of each of the

departments of JNPT in addition

to stakeholders from NSICT, GTI and BPCL

The following guidelines were provided to the participants while developing the
SWOT analysis

46

Strength

A port strengths are its resources and capabilities that can be used as a basis for
developing a competitive advantagewhich the port currently possesses.

Weakness

A port weakness are resources and capabilities that the port lacks in
comparisons to its competitors currently.

Opportunity

Opportunities provide prospect of profit and growth. Opportunities arise due to

changes that are occurring or areexpected to occur in the external environment
in which the port operates.

Threats

Threats are events that can lead to reduction of profit and growth. Threats arise
due to changes that are occurringor are expected to occur in the external
environment in which the port operates.

47

Vision Development
Following the as-is assessment, the vision of the port was developed. The first step
was an understanding of the business environment of JNPT. Constraints and drivers of
change in the environment were identified as part of this exercise. An important
constraint that emerged was the limited space for terminal side expansion at the current
location .This understanding of the business environment was used as the basis to
identify strengths, weaknesses, opportunities and threats for JNPT. Key strengths that
emerged for JNPT were the frequency of services, available port infrastructure and
strong financial position. Weaknesses at JNPT include distance from major shipping
routes, limited draft and shortage of staff in key areas. The most significant threat for
JNPT is the increasing pressure on road and rail connectivity. Other threats for JNPT
include developments by private competitors.

For the purpose of assessing opportunities, they were divided into 3 broad categories

Opportunities in export-import traffic (where the origin ordestination is within

JNPT's hinterland)

Opportunities from trans-shipment and Other value added opportunities

An analysis of potential cargo types for export import(EXIM) traffic on the basis of
two parameters, marketattractiveness and alignment to capabilities, indicated
thatcontainer and liquid cargo were attractive opportunitiesworth pursuing.

On analyzing the coastal trans-shipment opportunity, itwas found that certain factors
impacted

its

attractiveness,including

distances

from

major

shipping

routes,

othercompeting ports being developed and draft. As a result,the port could look at this
option opportunistically ratherthan as a key focus area. Aligned to the export
importtraffic focus, other potential value added services wereexamined which could
strengthen

JNPT's

positioning.Potential

value

added

opportunities

taken

up

forassessment included distribution, logistics and free tradeareas. An opportunity

48

assessment for JNPT wasconducted by analyzing opportunities based on four key

parameters

Strength/Weakness of port with respect to theopportunity

Revenue potential

Growth potential

Sustainability/ Stability of revenues

In the opportunity landscape for JNPT, export-importcontainer traffic, free trade zone,
distribution/logisticsemerged as attractive opportunities. In addition, Ro-Rocould be a
potential opportunity area for the port, which itcould pursue opportunistically. Based on
the assessment as well as the SWOT analysis, the vision was developedthrough a
visioning workshop carried out with port.

Marketing strategy

JNPTs marketing strategy would revolve around the levers of price, customers,
geographies, services andcommunication and would delineate JNPTs target
within each of the levers

Cost How would JNPT ensure competitive prices for its services and how
would it provide better value to itscustomers?

Customers What customers would JNPT focus on?

Geographies What geographies would be serviced by JNPT?

Communication What would be JNPTs marketing strategy to attract and retain

customers?

Services - What services would JNPT offer?

49

It is also imperative to realize that the marketing strategy outlined above would be
supported by a financial and
commercial strategy. The aim of the supporting strategies are as follows:

Financial Strategy: The financial strategy of the port focuses on utilization of

financial resources of the port. It delineates the sources of finance, expected
costs and provides a framework for identifying the source of finance for various
development activities.

Commercial Strategy: The commercial strategy deals with the three levers of
customer management, cost management and service offerings of the port. It is

50

aimed at

achieving commercial success within the operating business

environment through effective management of customers and suppliers.

The commercial and financial strategy for the port are detailed in the following sections
The commercial strategy of the port deals with therevenue flow to the port through the
elements ofcustomer management, cost management andservice offerings. The
execution of the commercialstrategy has to be in complete alignment with thevision and
port development strategy. Key focusareas identified in the port development
strategywould emerge as the revenue drivers of the portand thus determine the success
of the commercialstrategy.
Framework of commercial strategy
JNPT's commercial strategy would be influencedby variables in the external
environment such asthe business environment, customers andsuppliers. The methods
under JNPT's control that
can be used to determine its commercial strategyinclude services offered, cost
management and
customer management. The commercial strategyis illustrated in Exhibit .
JNPTs commercial strategy is influenced byseveral external variables as seen below

The business environment impacts cost andcustomer management through

regulatoryand other factors.

JNPT's supplier network impacts the kind ofservices it can offer as well as the
costincurred in providing those services.

The competitive environment will determinethe services that need to be offered

byJNPT and require JNPT to manage itscustomers

51

Framework of Commercial strategy

Services Offered
In line with the port development strategy, JNPT has defined certain focus areas over
the next 20 years. Theseinclude a strong focus on national export-import container
traffic as well as greater participation in the containerhandling value chain through
creation of logistics and free trade zones. Service offerings that JNPT is likely to
offerover the next few years are listed below

Container handling operations

Liquid cargo handling operations

Vessel related operations (towage, pilotage etc)

Logistics/Distribution zone

Free trade zone

52

Container freight operations/ empty depot storage

These service offerings would be influenced significantly by the competitive

environment. In case certain servicescurrently not offered at JNPT were to be offered by
major competitors, JNPT would need to create mechanisms tooffer similar services to
prevent diversion of traffic to these competitors.
Cost management
To ensure that its commercial strategy is effective, JNPT would need to effectively
manage its costs. These costsavings could directly translate into value offerings that
could help in attracting customers. Cost management couldbe attempted at two broad
levels
Operational Efficiency towards low costs : JNPT will continuously strive to improve its
operational efficiency levels.This could translate into substantial operational cost
savings.
Customer management
With increasing competition between ports, the element of customer service would
prove to be a key differentiator forthe port. To provide for effective customer service
JNPT would need to develop a culture that supports all customers sothat their needs
and specifications are met. JNPT would need to create and develop strong, positive
relationships withkey customers by developing and implementing customer relationship
management strategies and best practices.
Customer Acquisition/ retention JNPT would need to follow a multi pronged strategy to acquire customers. The strategy
would broadly consist of threeaspects which are as follows:

Provide value added services

Provide the best value for money

Marketing activities

Value added services - The port will develop value added services for customers to
increase the attractiveness of portand develop a sustainable competitive advantage.
These value added services would be in the area of logistics and willenable the port to
emerge as an integrated logistics hub in the country.

53

Best Value for Money - The port will endeavor to optimize its resources to generate
maximum throughput from itscurrent infrastructure. Apart from this the port will also
undertake automation projects to bring down the time and costrequired for various
processes. This will enable the port in lowering its overall cost for the customer.
Marketing activities - The port will also develop and expand a marketing team which
will undertake customermanagement exercises. This would primarily be aimed at
retaining and targeting key customers. The marketing teamwill take regular feedback
from customers and will have key accounts manager for strategic customers. These
keyaccount managers will resolve customer queries and issues.Contracts with
Suppliers: JNPT would ensure preparation of detailed specifications for all contracts and
orders toensure that quantities and goods and services procured are fit for purpose
using industry standards as the norm.Focus would be on optimal match of requirements
with order quantities. Contract management will take on an
increasing importance given the large number of projects likely to be taken up over the
next few years.An example of cost management in internal processes could be the
introduction of automation between CFSoperators and terminal gates. A different
illustration of cost management could be training of RMQC operators forcarrying out
double moves. This could translate into significant improvements in operational
efficiency and translate
into long term cost savings.

Marketing at JNPT
JNPT's marketing team will strive toward efficient customer management and
developing the same as a competitiveadvantage of JNPT over other ports. The role of
the marketing team will be centered around the following four aspects
Customers
Price
Promotion
Competition

54

Customers: The marketing team would be divided into key account managers. Each
account manager would beresponsible for 2-3 customers and would aim at maximizing
revenues from the customers as well as for resolving anycustomer related queries.
Price: The marketing team would constantly study the competitors and would play a
role in developing pricingstrategies for the port. These strategies would revolve around
volume discounts, growth discounts as well as routediscounts.
Competition: The team would regularly study the environment to develop reports on
competitor plans as well as futurescenarios. These would be provided to various
departments of the port for appropriate action. The team would also beresponsible for
identifying future opportunities. These can arise from specific routes, specific industries
or specificcustomers. The marketing team would then develop strategies to exploit the
opportunity for the port. These would be
passed to the senior management for review.
Promotion: The marketing team would regularly showcase capabilities of JNPT in port
and logistics to customers toattract new customers and retain strategic customers.

55

CHAPTER 6
QUESTIONARE

56

QUESTIONARE

Finally ranking wise list of port choice determinants are as follows - Shipping
agency?

Port choice Determinants Analysis scores Shipping agency?

Port Choice Determinant-wise Score for Ports shipping agency?

Freight Forwarders Response based Score for - Vessel Frequency?

Freight Forwarders Response based Score for Hinterland Connectivity ?

Freight Forwarders Response based Score for Port Infrastructure?

Freight Forwarders Response based Score for Port location (Sea-Route)?

Freight Forwarders Response based Score for Number of CFS?

Freight Forwarders Response based Score for All Determinants?

57

CHAPTER 7
ANALYSIS

58

Analysis

Ports in India
Globalization has led to an increase in world trade highlighting the importance of ports
as a trade gateway. About 95% by volume and 70% by value of Indias international
trade is carriedout through its port. Indias coast line of 7517 km is dotted with 12 Major
Ports and 187 nonmajor ports. The Major Ports are under the control of the Central
Government and the Nonmajor Ports are under the respective State Governments.

Major Ports
The total volume of the traffic handled by all the Indian ports during 2005-06 was around
576 million tonnes, of which 423 million tonnes i.e. around 74 percent was handled by
Major Ports and remaining 153 million tonnes by the Nonmajor ports.

Composition of Cargo at Major Port

59

Major ports of India

60

Evaluation of Export import cargo opportunities

61

GENERAL DESCRIPTION HISTORY

62

Plan of action to implement Strategy

A detailed plan of action was developed to implement the strategy for the port over the
next 7 years (between 2007- 08 and 2014-15). The action plan attempts to cover the set
of projects/ initiatives to be undertaken by the port in the plan period across the
following areas - Creation of new infrastructure

Efficiency improvement

Organizational improvements

The major aspects covered in action plan were as follows

Time Lines: An estimate of the timeframe of each project

Dependencies:

Indicates

linkages

and

dependencies

between

projects

highlighting need for focus on parallel development where needed

Critical success factors: This highlights key elements need to be addressed to

ensure success of the strategies. It consists of factors which are within/beyond
the control of the port

An overall implementation schedule for the various projects has been outlined

Navigational Facilities
The JNPT access channel which is an extension of Mumbai Harbour channel has a
depth of 11 m below Chart Datum (CD). The water depths in front of the berths at JNPT
are maintained at 13.5 m to CD.
The common main harbour and JNPT channelsectors are presently maintained at
depths 10.8
m - 11.1 m below CD. The total length of thedredged channel upto the end of Elephanta
deep
is about 15.21 Nautical Miles.At present, large size vessels up to 6,000 TEUsand
having a draft up to 12.5 m, navigate throughMumbai Harbour and JNPT Channels,
makinguse of the tidal window, which occurs twice in 24hours. Currently the channel is
used for two waynavigation of ships.
There are 2 mooring launches and 5 pilotlaunches to pilot the ships with 7 tugs for
towingthe ships.
63

Channel Limitations
At present, container vessels carrying up to 6000TEUs having a draft upto 12.5 m,
navigate
through Mumbai Harbour and JNPT channels,making use of the tidal window. Ships
having
draft larger than this cannot be serviced at JNPT.During monsoon ships with draft upto
11.8 m canbe serviced.
Navigational Facilities Mumbai Harbour and JNPT Approach Channel

64

Berthing Facilities
At present JNPT has three container terminals; JNPCT, NSICT and GTICT. Apart from
this JNPT also has a shallow berth and two captive liquid cargo berths for BPCL.
JNPCT is operated by JNPT and NSICT (set up on BOT basis). The Bulk cargo terminal
comprising the bulk berth and two multipurpose berths are under conversion as a Third
Container Terminal (on BOT
basis) by a consortium of MAERSK and CONCOR as GTICT. Liquid Chemical Terminal
Bharat Petroleum Corporation Limited (BPCL) and Indian Oil Limited (IOL) are
operating a liquid bulk terminal on BOT basis to handle bulk liquid chemicals, POL and
edible oil. Shallow Water berth - It can handle 165 m LoA for break bulk and container
purposes
Existing Port Facilities

65

Storage Facilities
Container freight stations are the hubs for import andexport of more than 80% of the
cargo handled by theport. Presently there are 16 Container FreightStations (CFS) in
operation outside the portpremises; while necessary investments are beingmade by few
more of them.The total capacity of CFSs is sufficient to handle thepresent container
traffic. There are around 20 empty
container yards that have come up near the JNPTarea to store empty containers.
The port had originally 6 Transit Sheds / Over FlowSheds of area 1,10,780 sq. m. and
open storage areaof 1,48,850 sq. m. within the port. Most of these havebeen
decommissioned / dismantled for conversioninto container stack yards and other yard
facilities.Additional details on port facilities are in Section 6 ofinception report.

Storage Facilities

66

Cargo Handling Equipment at JNPT

Limitations of terminal operation

Internationally container terminals focused on Origin destination traffic maintain an
average ratio of number of RTGCsto each RMQC as 3:1. Unlike NSICT and GTI
(planned) both of which have RTGC to RMQC ratios over 3:1,JNPCThas a ratio of
2.25:1. This may be hampering JNPCT crane moves per hour and overall productivity.
At the liquid chemical jetty, the limited discharge rate of a large number of pipelines owing to
their small diameter vis-visthe achievable ship discharge rate is a restriction. This reduces the
flow rate of liquid chemicals and increases shipturnaround time.

67

Unique Selling Proposition Competitive Rating of ports

Competitive Rating of Ports
According to the port users the two mostimportant factors in choice of a port are
-

Port Location

Port Infrastructure

JNPT emerges as the overall port ofchoice with Mundra and Pipapavperceived to be the
next best ports.Port users believe that in the futureMundra and Pipavav have the
potential tocapture JNPTs share of market from thenorthern regions.JNPT has high
ratings in areas such as
shipping frequency and hinterlandconnectivity.Mundra and Pipavav are rated highly in
terms of ease of paperwork.It is important to note that the parameterson which JNPT
has an advantage overothers are not entirely in JNPTs controlThese are areas such as
frequency and
hinterland connectivity.As frequency and hinterland connectivityof other ports improve
JNPT will facecompetition. Hence JNPT should plan todevelop sustainable sources
ofcompetitive advantage.

68

Comparative Ratings from Port Users

The three unique selling points of JNPT over other portswere found to be -Hinterland
Connectivity Hinterland connectivity has been covered in detail in the infrastructure
section.
Users believe that inspite of congestion problems, incomparison to other ports JNPT still
rates higher on connectivity. JNPT has the maximum number of regulartrains visiting it.
Pipavav and Mundra have a single track diesel connectivity while JNPT has a double
line connectivity.
Frequency Currently JNPT has the highest frequency of services to major shipping
destinations. As acomparison JNPT had 1772 (977 NSICT and 795JNPCT) vessel calls
while Mundra had 480.Infrastructure JNPT currently has the largest in frastructure in
comparison to other ports. The closest competitor for container traffic, in the western
region, to JNPT is Mundra. Mundra has 632 metres quay length and 6 cranes while
JNPT has 1280 metre quay length and 16 cranes (excluding GTIPL). JNPT therefore
hasan advantage compared to other ports in Infrastructure. Specific areas of advantage
for JNPT are the presence of 16 CFS operators with 12 new operators scheduled to
begin operations shortly. This is far more than its
competitors

69

Unique Selling Points

70

Development of JNPT Vision

With the Indian economy currently poised to grow at a significant rate, there are a
number of opportunities that a portcan potentially align itself to. However, each port has
its own characteristics that enable it to play a specific role in thecountrys growth.
Various factors would impact this positioning including its location and hinterland, its
physicaladvantages and limitations, its operational strengths and weaknesses as well
as its competitive environment. In thiscontext, the port has to make careful choices
about its key focus areas, such that the port can play its service-orientedrole in the
regional context.Our approach to developing the vision for JNPT was based on a
combined assessment of a number of internal andexternal factors. On the internal front,
an overall assessment of strengths and weaknesses with respect to itscompetitors was
carried out, which assessed JNPT's capabilities with respect to competing ports. This
clearly indicatedthat while JNPT had capabilities in some key areas, it also faced
constraints and issues on the other. On the externalfront, a view was taken on the
overall potential for cargo growth in the hinterland and the threats that emerged
fromcompetition and changes in the external environment. JNPT faces competition
primarily from the ports in westernregion. These include the ports of Mundra, Pipavav,
Kandla, Mumbai and Rewas. Apart from this the port also faces
competition in transshipment cargo from Salalah, Colombo and Karachi.

Activities leading up to vision development

The vision development process for the port was a participative one, where port senior
management and keystakeholders were involved in discussions related to generation of
vision options and finalisation of the eventual vision.The key activities that were
conducted as part of the visioning exercise were:
-

Background analysis and opportunity assessment by the consultant

Conduct of a SWOT workshop with port internal stakeholders

Discussion of SWOT output and conduct of visioning exercise with port senior
management and key externalstakeholders

Discussion of visioning exercise output with chairperson and senior management

of the port
71

The approach for vision development

The approach that was followed for developing the vision was a structured one, which
built on the approach and somekey observations identified as part of the inception
report. The objective was to systematically develop a positioning forthe port which it can
sustain for the next 20 years. It essentially consisted of the following components:
-

Identification of key drivers and constraints impacting the port

SWOT analysis - High-level assessment of the strengths, weaknesses and

threats related to the port.

Opportunity analysis was carried out in detail separately

Preliminary short-listing of opportunities for the port based on identified criteria

Detailed analysis of attractive opportunities, including traffic projections

Formulation of vision statement

A summary output of each of the above is discussed in the following sections as

a background todevelopment of the vision.
A number of inputs went into the analysis and discussions at each stage of the vision
development process, whichincluded:
-

Analysis of macro-economic factors Key drivers and traffic projections were

derived from macro-economicand industry trends

Competitive analysis The growth plans of competitors as well as their relative

positioning have impacted theshare of cargo that JNPT is likely to get.

Shipping industry analysis Industry trends in terms of shipping lines, cargo

routes and vessel sizes were usedto identify key imperatives for JNPT from a
transhipment and sea side capacity perspective

IDENTIFICATION OF CONSTRAINTS AND DRIVERS IMPACTING THE PORT

Any constructive vision exercise has to take into account the key macro-trends
impacting the port and assess theboundaries within which the port operates. A
recognition of these factors allows the port to apply a reality checkon any
recommendations that are made for its vision. In discussions that were conducted as
part of the keyworkshops, a number of key points emerged as drivers and constraints

72

for JNPT, which effectively fell into 4distinct categories. These have been detailed in
subsequent pages
a. Port and Cargo related factors
Drivers and constraints
-

Consolidation of shipping lines and increasing ship sizes

Increase in trade on Asian routes

An increasing trend of shipping lines integrating into portoperations

The export import imbalance in India

The limited area available at JNPT for expansion on the seasideand land-side in
the current location leading to capacity limitations

b. Hinterland factors
Drivers and constraints
-

Significant growth in the hinterland economy leading to anincrease in traffic

The related impact of SEZs and other such initiatives by theGovernment leading
to additional growth in traffic

The introduction of VAT which could impact logistics anddistribution

Constraints being faced by the port in road and railConnectivity

c. Regulatory Factors
Drivers and constraints
-

Increased focus on PPP models as a means of rapid portinfrastructure

development

The imperative for major port trusts to operate under MPT actand TAMP
regulations

Increased security needs across ports and resultant costs atPorts

d. Competitive Environment related factors

Drivers and constraints
-

The entry of international and national private players into theport sector by
setting up competing ports

The impact of international ports such as Salalah, Colombo ascompetition to

Indian ports
73

Identification of constraints and drivers impacting the port

74

Development of JNPT
Based on the above analysis, opportunities were rated as shown below. Cargo types
like Dry Bulk, Break Bulk wereobserved to lack from a market attractiveness as well as
a JNPT capability perspective. LNG was perceived to be ofuncertain stability and
growth potential. Coal as a dirty cargo was not aligned with JNPT's positioning as a
generalcargo port. The Ro-Ro and Cruise opportunities seemed attractive financially but
were not aligned to the specific
capabilities of JNPT. Container and liquid cargo emerged as attractive opportunities.
Based on the above criteria,detailed analysis was taken up for specific export import
cargo types in the next stage, i.e.

Container

Liquid cargo

Detailed assessment of opportunities

obtain additional senior management inputs to arrive at the set of opportunities which
JNPT which would focus on froman end-state perspective. The set of opportunities
considered for detailed assessment included the following:
Export Import Cargo

Container

Liquid Cargo

Transshipment (coastal and regional)

Distribution Hub (Regional distribution facilities/warehousing)

75

Logistics Hub (warehousing, distribution, logistics and packaging)

These opportunities were analyzed in detail based on four key parameters

Strength/Weakness of port with respect to the opportunity

Revenue potential

Growth potential

Sustainability/ Stability of revenues

A summary of the analysis of these opportunities has been provided in annexure 1.2 to
provide an assessment ofthe discussions that took place on these opportunities. The
analysis that has been carried out was used primarily tofacilitate discussions from a
JNPT perspective.
A summary of the opportunity landscape was prepared for JNPT based on revenue
potential and growth andsustainability as shown below, which was used for further
discussions during the vision development stage. Thislandscape is based on the
assessment of opportunities detailed in annexure 1.2. Benchmark figures are based
onJNPT data and industry research as illustrated in annexure

76

Opportunity Landscape for JNPT

Workshop
Carried out keeping a few key factors in mind - JNPT has limited sea-side and land-side
resources which it must use prudently. The choice of vision has to be aligned to the
activities that are already undergoing at the port. Changing the priority of the port
completely to a different type of cargo form what it is handling today could be
retrogressive, even if the alternative opportunity was attractive Value-added
opportunities must be aligned with the vision of the port and the expected priorities in
the future. An objective to purely maximize the economic value of the available land
may lead to sub-optimal decisions. Key participants in the vision development exercise
were representatives from the following entities:

77

To be recognized as India's premier container port providing integrated logistics

services to the best interest of trade and customers

Each of these elements havea impact on the manner in which JNPT executes the vision
over the period of the business plan. The elements of the vision are Focus business areas
Other Cargoes serviced
Geographies of focus
Value Added Services
Guiding Principles
78

Focus business areas

JNPT will maintain a clear focus on containers as its core business and will attempt to
remain Indias largest container
port providing customers with the best container handling experience in the country.
Other Cargoes Serviced
JNPT will also serve coastal trans-shipment needs of the Indian sub-continent for traffic
that arrives at the port in itsnatural course of operations. This cargo is likely to be transshipped coastally from other smaller regional ports. Theport may not actively invest
additional resources in seeking transshipment cargo. This transshipment cargo is likely
tobe regional or coastal in nature.Since the infrastructure required for Ro-Ro services is
largely similar to that of containers, JNPT will be ready to serviceRo-Ro in the future in
case the market for Ro-Ro expands and the potential for containers falls.Since JNPT
has already committed resources to liquid cargo it will continue to serve this cargo in the
future. It will also enable JNPT to derisk its cargo profile going forward.
Value Added Services
JNPT will conceptualize and establish a state of the art logistics hub offering

Warehousing and forwarding facilities (including storage/stuffing/stripping of

containers)

Value added services processing of goods according to specific customer and

country-of-destinationrequirements,

packing

and

re-packing,

labeling

and

assembly, sorting and invoicing

Free trade zones/export processing areas

State of the art communications infrastructure

Multimodal transport facilities

JNPT will also attempt to enter into partnerships with various container rail freight
operators so as to develop dedicatedservices to JNPT from northern hinterland. This
gains importance in light of 13 new licenses for container rail freighthandling operations
having been issued by the Government of India. JNPT could enter into partnerships with

79

one ormore of these players to offer a regular service to exporters/importers. Such a

partnership would help in retention of
JNPT traffic from the northern hinterland.
Guiding Principles
JNPT's guiding principles are obtained from its current mission statement which
stresses on fulfilling the needs of the
nation as well as ensuring safety and security. The significant guiding principles derived
from the mission statement are

Enabling Indian trade through JNPT, efficiently and smoothly

Ensuring safety and security at the port and development in the area around the
port

Creation of value for customers through value added services

Expanding capacity and upgrading equipment in line with customer requirements

80

Value Added Services

JNPT will conceptualize and establish a state of the art logistics hub offering Warehousing and forwarding facilities (including storage/stuffing/stripping of
containers)
Value added services processing of goods according to specific customer and
country-of-destination
requirements, packing and re-packing, labeling and assembly, sorting and invoicing

Free trade zones/export processing areas

State of the art communications infrastructure

Multimodal transport facilities

JNPT will also attempt to enter into partnerships with various container rail freight
operators so as to develop dedicatedservices to JNPT from northern hinterland. This
gains importance in light of 13 new licenses for container rail freighthandling operations
having been issued by the Government of India. JNPT could enter into partnerships with
one ormore of these players to offer a regular service to exporters/importers. Such a
partnership would help in retention of
JNPT traffic from the northern hinterland.
Guiding Principles
JNPT's guiding principles are obtained from its current mission statement which
stresses on fulfilling the needs of thenation as well as ensuring safety and security. The
significant guiding principles derived from the mission statement are Enabling Indian
trade through JNPT, efficiently and smoothly

Ensuring safety and security at the port and development in the area around the
port

Creation of value for customers through value added services

Expanding capacity and upgrading equipment in line with customer requirements

Identification of goalsDevelopment of a business plan aimed at achieving thevision

requires that the vision is cascaded to goals and astrategy to achieve those goals is
developed.The goals and strategy are then converted into an actionplan for the
81

organization.It is imperative to understand that goals should beanalyzed to assess the

time period within which they canbe achieved. This would help in differentiating
betweenlong term goals and short to medium term goals.The short to medium term
goals need to be converted intoan actionable plan that can be implemented and
monitoredby the port while the long term goals should be evaluatedat a later stage and
an action plan for the same should bedeveloped at that time. This is because an action
plan for along term goal might become irrelevant in light of thechanging scenario and
emerging trends in the industry overthe long term.
Characteristic of a well defined Goal
KPMG has followed a set of principles to ensure that the
goals developed for JNPT are specific, actionable and timebound

A goal should be specific and aligned with the vision

A goal should be relevant to the vision and should addresscritical aspects of an

organization (capacity, serviceoffering and efficiency etc)

A goal should be time bound and an immediate or mediumterm goal should have
a specific time line attached to them

A goal should be achievable and should not consist ofunrealistic aspirations

82

PERSPECTIVE PLAN

83

Identification of Goals

Each element of the Vision is analyzed to identify the goals that would be required to
achieve the vision

Each element of the Vision is analyzed to identify the goals that would be required to
achieve the vision

As can be seen the Goals identified deal with the following critical aspects:

Capacity

Achievement of 10Mn TEUs of traffic at JNPT

To expand JNPT to new locations

Efficiency

Improve efficiency across the port to achieve 2200 TEUs/m quay length

Service offerings

To develop logistics capabilities and services at JNPT

Invest into hinterland connectivity ventures

84

PRIORITIZATION OF GOALS

Achievement of the vision require a sequence of goalsto be achieved by JNPT.

KPMG has evaluated thesegoals on the following parameters to ascertain
theirtimeframes and to make each goal time bound:

Ease of implementation This factor takes intoconsideration various aspects that

have an impacton the implementation of the goal. These wouldinclude
Resources required Each goal would requirea different set of resources
for itsimplementation. An assessment of theavailability of resources with
the port vis--visresources required was used to evaluate thisparameter
Capability JNPT has traditionally been a portoperator and off late is
developing into alandlord port. This parameter would evaluateJNPTs
capability in achievement of the goal
Business Environment This factor includesfactors such as market
demand, competition,entry barriers, regulatory aspects etc toevaluate
whether the environment is conduciveto achievement of a particular goal

Criticality This parameter measures if a goal iscritical to the vision. A highly

critical goal wouldhave to be achieved at the earliest even if it scoreslow on ease
of implementation

85

Framework to analyze goals

PRIORITIZATION OF GOALS

86

87

88

Short and Long term goals

Expansion to new locations

JNPT can also explore the opportunity to expand into new locations. The new locations
could be in the same regionand about 80-100 Km away from the existing port. The new
port can act as a sister port to the existing port andcustomers can be provided services
across both the ports. The port can explore a number of options to expand intonew
locations as listed below:

Public private partnership to set up a new port : JNPT and a private developer
enter into an MoU to develop theport and enter as equity partners.

Acting as a development authority for the port :Here the government invests in
the venture and hands over thedevelopment activity at the port to JNPT. JNPT
then enters into BOT for terminals with private parties foroperations

89

Taking up container terminal operations in such a port set up by a 3rd party :

JNPT could enter into a differentarea by attempting to be a terminal operator with
investments at the new port, in a departure from its role asdevelopment
authorityA decision on the mode of entry would be based on those capabilities of
JNPT that would help in development ofgreenfield port

Port Development capabilities (infrastructure, roads etc)

Marine capabilities

Terminal operation capabilities

Experience in forming PPPs

Ability to attract private operators to invest

It is important to mention that the attractiveness of these options would to a large

extent be determined by thebusiness and regulatory environment prevailing then,
which is something that cannot be factored in nowIt is expected that the
development as port authority has the highest alignment with the ports
capabilities. Its financialbenefit would to a large extent be determined by the
agreement entered into between various stakeholders(Government, port, private
players)

The role of JNPT in such an arrangement is envisaged to be that of a port development

authority responsible fordevelopment of basic infrastructure. The operations of the
terminal would be handed over to private players on a BOTbasis. Such a PPP model
would be an attractive option financially for JNPT and could be a profitable use of
theinvestible surplus which would be created post 2015-16.

90

PORT HINTERLAND RELATIONSHIP

Port is

essels to road or rail or

other vessel and vice-versa.

A place where cargo is stored.

Ports Hinterland is

area. Customers are normally send/receive good through ports.

"Hinterland" was borrowed from German, where it means literally the land behind
(a city, a port or similar). Some ports will have hinterlands that extend across
many states, while other ports will have smaller hinterlands.

91

Ports Hinterland Relationship and Stakeholder

92

HINTERLAND REGIONS OF INDIA

Out of total 28 states in India only 9 states have a coastline and other states are
land-locked.

India consists of three hinterland regions:

Western Hinterland

Eastern Hinterland

93

Hinterland Regions of India

94

WESTERN HINTERLAND ANALYSIS

North Western Hinterland

95

HINTERLAND MAPPING FOR PORTS

TEU = Twenty feet Equivalent Unit

A measure used for capacity in container transportation

Used to describe the capacity of container ships and container terminals.

A reusable transport and storage unit for moving products and raw materials
between locations or countries; the terms container or box may be used on their
own within the context of shipping.

A related unit, the Forty-feet Equivalent Unit (often FEU or feu) is defined as two
TEU.

Container i.e. Number of TEUs movements are as below for selected ports. Only
loaded containers are considered for the purpose of study. Empty containers are
not included.

Whenever any FEUs movements are observed, it is treated as two TEUs as per
industry norms.

Mundra Port

State-wise Share of Containers - Mundra Port

Source: MICT, MPSEZCT, Port Authority and MPSEZ - Adani

96

Kandla Port

State-wise Share of Containers - Kandla Port

Source: ABG Kandla Container Ltd., Port Authority and MPSEZ Adani
PipavavPort State-wise Share of Containers Pipavav Port

Source: APM Container Terminal Ltd, Port Authority and Customs Department
97

JNPT State-wise Share of Containers - JNPT

Source: MPSEZ Adani

98

Calculation for Hinterland Mapping

STATE-WISE HINTERLAND MAPPING FOR MUNDRA PORT

99

Percentage (%) Share of States for Containers Mundra Port

100

Share of Type of Hinterland Mundra Port

101

Hinterland Mapping Mundra Port

102

103

104

105

106

107

108

109

110

111

112

Finally ranking wise list of port choice determinants are as follows

113

114

Port Choice Determinant-wise Score for Ports

Freight Forwarders Response based Score for - Vessel Frequency

115

Freight Forwarders Response based Score for Hinterland Connectivity

116

Freight Forwarders Response based Score for Port Infrastructure

117

Freight Forwarders Response based Score for Port location (Sea-Route)

118

Freight Forwarders Response based Score for Number of CFS

119

Freight Forwarders Response based Score for All Determinants

120

CHAPTER 8
CONCLUSION

121

CONCLUSION

All Gujarat ports have rail distance benefit from ICDs which is of important factor.
This is not applicable in case of Madhya Pradesh and Uttar Pradesh.

If Mundra and Pipavav will increase Vessel Frequency and Hinterland

Connectivity then together with 1st and 2nd rank determinants, both can attract
more container cargo.

Mundra has to keep an eye on Pipavav as upcoming competitor because

Pipavav is much closer in terms of Port Infrastructure to Mundra as well as for
Delhi region shippers.

Rajasthan and Gujarat both are potential hinterland for all Gujarat ports due to
proximity.

Haryana and Madhya Pradesh is still under influence of JNPT so long term
efforts are must from all Gujarat ports.

Punjab, Delhi and Uttar Pradesh are required to be maintained with same level of
quality and timely service.

Infrastructure wise JNPT is ahead of all ports but Mundra is also equipped with
modern and adequate infrastructure for coming few years so in future Mundra
can be seen as one of the biggest container handling port in west coast.

122

CHAPTER 10
RECOMMENDATION

123

RECOMMENDATION

Port location from main sea routes and Port ICDs rail distance are such
parameters those cannot be changed.

Mundra, Kandla and Pipavav have benefit of Port ICDs rail distance factor
which they should focus more to attract container cargo from northern hinterland.

For Mundra and Pipavav, it is easier to serve the potential container cargo as
they have already penetrated in northern region states and they are equipped
with required infrastructure to meet near future demand.

Time to time up gradation of infrastructure is required for Mundra and Pipavav

with strategic vision.

Major issues are Vessel Frequency and Hinterland Connectivity which must be
achieved then first two rank determinants will be strength of both Mundra and
Pipavav to attract more container cargo. Though in last 6-8 months hinterland
connectivity is improved by rail frequency but still it requires more.

Mundra has to take care of Delhi region as Pipavav is looking at the same
lucratively.

Rajasthan is not yet covered as efficiently as it should be even though it is the

nearest neighbour state of Gujarat which can be attracted by road transportation
also from near districts of Rajasthan.

Ensuring availability of cargo is even necessary as vessel frequency and

availability of cargo goes hand by hand and works symbiotically to get benefit of
increment.

Kandla can even focus for neighbouring states with existing facilities. It can
attract container cargo but has to undergo for many improvements.

Customs Clearance should be hassle free, less time consuming and smooth so
more container cargo can be attracted.

Associations should be done with Ship Liners and Industrial clusters to attract
more cargo.

124

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